BY BANKERS REPOTER
Life insurance product buyers are set to enjoy more accurate pricing for life insurance products following the launch of the Assured Lives Mortality Tables by the Insurance Regulatory Authority of Uganda (IRA).
The 2015-19 tables will offer up-to-date reflective statistics that will be used by Life Insurance companies currently operating in the market, as a baseline for costing risk for better and accurate pricing.
A mortality table indicates the rate of deaths occurring in a defined population during a selected time interval, or survival from birth to any given age. The table thus shows the general probability of a person’s death before their next birthday, based on their current age.
The tables are used to inform the construction of insurance policies and other forms of liability management.
Uganda, like most other African countries, has been relying on mortality tables developed in the developed economies to come up with suitable premium rates.
This, however, could not give a true representation to aid the setting of accurate premium rates given the difference in mortality rates.
IRA Chief Executive Officer, Kaddunabbi Ibrahim Lubega said this was a great achievement for Uganda as a growing economy.
He noted that Uganda now joins South Africa and Kenya, as the only countries on the African continent with mortality tables.
The World Bank supported the IRA to develop the Assured Lives Mortality Tables for Uganda.
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The process involved the development of data collection tools and data collection from all life insurance companies.
The collected data included figures for all products and all lives under the Individual and Group Business during the five years ending 31 December 2019.
He noted that all life insurers were directed to use the Assured Mortality tables, effective August 1, 2021 to price new individual life insurance and annuity products.